Clarifying media reports that Road Transport Minister Nitin Gadkari may seek 10% GST hike on diesel vehicles, he said on Tuesday that ‘there is no such proposal currently under active consideration’.
In a tweet, he wrote, “There is an urgent need to clarify media reports suggesting an additional 10% GST on the sale of diesel vehicles. It is essential to clarify that there is no such proposal currently under active consideration by the government.”
“In line with our commitments to achieve Carbon Net Zero by 2070 and to reduce air pollution levels caused by hazardous fuels like diesel, as well as the rapid growth in automobile sales, it is imperative to actively embrace cleaner and greener alternative fuels,” he added. “These fuels should be import substitutes, cost-effective, indigenous, and pollution-free.”
Earlier, while speaking at the 63rd Annual SIAM convention in New Delhi, Gadkari said he was planning to propose an additional 10% tax on diesel-run vehicles and generators if there is excessive usage.
"I am going to hand over a letter to the Finance Minister this evening stating that an additional 10 per cent GST be put on diesel-powered vehicles,” he had said during the event.
Following Gadkari's statements, shares of diesel automakers like Ashok Leyland, Tata Motors and Mahindra & Mahindra plunged up to 2.5 per cent. Tractor makers Swaraj Engines and Escorts Kubota also saw a dip of as much as 3 per cent in shares.
Oil marketing firms Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOC) also witnessed a drop in shares to the day's low.
Gadkari said the contribution of diesel cars has already come down drastically in the country and the manufacturers need to stop selling them in the market.
"Say goodbye to diesel... Please stop making them, otherwise we will just increase the tax so much that it would become difficult to sell diesel cars," Gadkari said, adding that he will seek additional GST on diesel-powered generators too.